FCC Finally Starts Process To Dump NFL Blackouts

from the about-time dept

Forty years ago, there was a theory going around that if a professional sports team didn't sell enough tickets to their games, it would be a good idea to punish the viewers of their television product, also known as their other revenue stream, in some kind of ham-fisted attempt to get them to purchase tickets instead. While this was stupid even then, this was back when ticket sales and in-stadium sales represented a massive percentage of an athletic team's revenue. It was also back when the style of the television broadcast meant that poor attendance was hugely reflected on the home screen, which could have a negative impact on the perception of the team, the entertainment product, and the sport in general. Still, anyone with even an iota of thought that any of this was a good idea only had to look at the Chicago Blackhawks' popularity (or lack of it) during their blackout period to know how misguided this all was.

Yet this practice has gone on in the NFL for the past four decades. And, while league officials love to point out how few blackouts have occurred since implementing the policy, they're conveniently forgetting to tell you about how teams are gaming the system by buying up remaining tickets or altering their stadiums to avoid the blackouts. Less known is that the FCC has been a partner in these NFL blackouts for all these many years, but now that looks to be changing. They recently voted to lift the blackout restrictions entirely, recognizing that they were at best a strategy for a different time.

"The sports blackout rules were originally adopted nearly 40 years ago when game ticket sales were the main source of revenue for sports leagues...," the FCC said. "Changes in the sports industry in the last four decades have called into question whether the sports blackout rules remain necessary to ensure the overall availability of sports programming to the general public."

So, what are these changes that the FCC is recognizing? Well, for starters, ticket sales and stadium sales aren't the mass revenue generator they once were. They're still important, of course, just not as important as the insane television and advertising deals now in place.

The networks pay a combined total of about $3 billion a year to broadcast NFL games based on a nine-year deal signed in 2011 worth almost $28 billion. Neither Fox Sports nor CBS Sports, the main carriers of the NFL, had any comment on the FCC's proposal.

No, I suspect the networks were too busy keeping their heads from nodding in vigorous fashion at the FCC ruling to comment on much of anything at the moment. Because, while there have indeed been few blackouts, even the threat of a blackout is a stick in the eye of the advertising cow that is the NFL. More stability in the availability of the product is of course a great thing for them, particularly given that NFL teams tend to be in larger markets and local blackouts effect massive amounts of people. So we're all happy happy here, yes?

No, of course not, because the NFL appears to be run by people who have spent too much time hitting one another with their heads.

The NFL said in a statement that it will "strongly oppose any change in the rule. We are on pace for a historic low number of blackouts since the policy was implemented 40 years ago. While affecting very few games the past decade, the blackout rule is very important in supporting NFL stadiums and the ability of NFL clubs to sell tickets and keeping our games attractive as television programming with large crowds."

Nothing the FCC votes on prevents the league and/or teams from implementing their own blackout rules, so the NFL is free to continue down that path out of a fear of the television product showing less people at the stadiums. But that, dear friends, is stupid. It's stupid for several reasons. First, wider television audiences build up the fanbase and bring in greater crowds to the stadium. That was the lesson the Blackhawks should have taught everyone. Second, the NFL has never been more popular than it is today. Given that, if there are less people at the stadium, guess where they're watching? Yup, on their televisions, which we already know are now the major cash cow of the teams and the league. So you're going to cut that highly-paid nose off just to spite your stadium face?

Still, more television access, more streaming, and less restrictions are a trend that cannot be fought. It may take a change in leadership, but eventually the NFL blackout rules will go the way of the no-forward-pass rules, and they'll be all the better for it.

Reader Comments

But on Techdirt notions, why do the networks have to pay anything?

After all, the teams would still have their game even if the networks televised it without paying. And the consumers come first: anyone should be free to set up a camera, tap into a 100G line, and "monetize" the content, right? -- RIGHT? -- Well, I'll assume no sports fan thinks that practical, so I'll just sweep along to: How are NFL teams any different from producers of movies? Why are the teams (of millionaires) entitled to get income from transient content over a meaningless sports contest -- which spectacle you could field for under a hundred thousand, actually -- but those who put a $100 million and thousands of hours into movies should be happy if their content is uploaded to file hosts for anyone to enjoy? HMM?

Meh. Like talking at dogs.Where arrogance meets ignorance to conspire what they'll do with someone else's $100 million movie.

Re: But on Techdirt notions, why do the networks have to pay anything?

Good to see that you understand exactly what is going to happen in the no so far future.

Everyone and their cats will be able to stream games live or otherwise for free or for a fee to anyone they want competing with television networks and the NFL's it will be a mess, a wonderful mess.

Here is the thing, with a thousand streams of the same game from every angle possible, some interesting possibilities start to appear, people will be able to digitize and make 3D renderings of those games meaning they will be able to pause a game look around and see it from every angle and continue to view it after, calculate velocities, trajectories and so forth.

Who will pay for it all?

Well, if the NFL is anywhere intelligent enough they will try to contact those people and offer them special deals, not billion dollar deals that no one would be able to pay, they could even have other revenue sources by licensing streaming rights to anyone who wants it for the price of ticket plus a cut of any advertisement revenue from their own fans, but I guess there is nobody in the NFL brain dead pool of managers capable of thinking of such schemes after all they are no Steve Jobs LoL

great.

And maybe when they're done with that, they can start on the rest of the sports with ridiculous blackout rules, like the NBA, MLB, and NHL.

Nothing worse than looking for a game to watch, seeing a Lakers game on a 'national' cable outlet like TWC Sportsnet, and being blacked out, because I should be at Staples Center, despite living on the complete other side of the country.

Re:

As long as a team has a sufficient draw on the local population, blackouts may motivate a little.

If the less interested people in the area do not see it on tv, you may have just made a negative spiral: Less people watch, less people care, which in turn makes even fewer people watch. Add to that a completely uncompetitive and uninteresting team and we are talking serious decay in team renome.

As much as it can be a union-preserving move in some cases, it is even more so, completely illogical and has the potential to bankrupt the least interesting/smallest market teams.

Re: And this is why unions have spent the last few decades dying off

Any hint of change in the status-quo, and they scream "union busting" and cry and sulk and pout until the government gives in to their protectionist demands. Of course, if anything, this makes the business dumb and lazy, causing them to collapse faster.

Oh my. Buy DirecTV stock. One of the biggest downsides to the NFL sunday ticket that a TON of people bought every year was that local sports teams were NOT included in the package, with rights to those games (whether they chose to show it or not) was the EXCLUSIVE rights of local broadcasters.

Or maybe not. If this just stops the "blackout the game if we don't sell-out a stadium" rule, then it won't do anything for the local broadcaster "exclusive right to broadcast in local area" rights.

Oh well. One step closer to the people getting what they want, and not what corporations want us to have.

I long ago gave up on the blacked out sports. Missing enough games that eventually I didn't care anymore who played, won, or lost.

Today, lots of the younger generation are the same way. They no longer care about the sports for a large portion. The franchises have lost their audience. Between the ever higher fees for cable tv and blackouts, people are cutting the cord and not returning. They've reached the point of pricing themselves our of business. With them loosing 100,000 subscribers every month, I'd say major changes have to happen for them to stay in business.

NFL is standing alone

The NFL's arguments are irrelevant. The FCC isn't concerned with the status of stadiums and their attendance. Their focus is on sports programming being available over the airwaves. The economics of the league itself are so stable that they themselves admit that they have a historic low in blackouts, effectively admitting that blackouts are not going to affect viability of the league and likely not the individual teams. That last is questionable and they like to point it out, but it doesn't matter. The amount of programming available to broadcast will not go down if the blackout is removed and that is the FCCs only mission in this affair.

Backwards?

IIRC, you guys have it backwards? I think it was Nixon who signed a law PROHIBITTING a balcout if the game was sold out. until then, games were routinely blackedout in the home market (but available in other places??!!) so the only way to see your home team play at home was with a stadium ticket. Believe it or not, the owners thought this was a good idea, to screw a million fans to sell 50,000 tickets.

The outrage as audiences grew and tickets became impossible to find in popular markets resulted in the "no blackout when sold out" law by the early 1970's. There were stories of businesses buying up the last 1,000 tickets or some such as a good will gesture to force a game to be televised.

* * * * If you want to see the future, look at the CFL - the Canadian Football League, just like real football only rinkier-dinkier. Recently they signed a deal with TSN to broadcast many of the games - so the viewing rights have disappeared behind a paywall. The same with many options for watching hockey - the NHL is also mostly on extra-payment option channel TSN, and getting worse.

ABC used to have their shows online the day after - now you need a cable channel account or you have to wait a week to see recent episodes. (I haven't checked, but I bet they also show commercials, after you'e paying for the privilege of viewing them.)

Public Money

My whole issue is why blackouts continue occurring on games in stadiums built at least 50% on taxpayer money. If the public is putting significant dollars into it, do they not have a right to see what they are paying for?

If a team builds the stadium itself and puts together a team, I understand them wanting to protect their product (Not saying this is proper way to go about it...I am using their logic)....but the amount that cities are paying these days in terms of daily upkeep and building costs....is insane.